Aer Lingus, Cathay and others face fundamental questions: What to do with a broken airline model?
Airports, aviation suppliers and manufacturers, financiers, the tourism sector and passengers beware: there are unprecedented numbers of airlines flying today with badly broken business models. The global economic downturn and health pandemic has severely dented the revenues of airlines whose margins are brittle in the best of times. Premium travel has collapsed and there are now fundamental questions being asked about the timing and extent of a recovery in this crucial sector. That word “fundamental” is appearing now with chilling regularity. The current Northern Summer travel peak is masking many of the deep structural flaws besetting the industry. But as the holiday hordes now fade, the bleak reality is setting in for many airlines. In the absence of a miracle economic recovery, the airline industry is in for its coldest ever Winter. There could be numerous casualties. International Air Transport Association (IATA) recently observed that “structural declines” in premium traffic are